The Department of Labour is looking to introduce regulations to labour broking, which would decrease worker flexibility, change wage structures and increase ministerial powers.
While the department's amendments signal that it is moving towards increased regulation instead of an outright ban - the impact of the proposed amendments is still under discussion.
The contents of a discussion document, submitted by labour minister Membathisi Mdladlana earlier this year, have surfaced, indicating what issues are currently under heated discussion. The proposals, which were submitted earlier this year to Nedlac by Mdladlana, reveal the proposed changes to the Labour Relations Act (LRA).
The Department of Labour is proposing amendments to several Acts, which all fall under the Labour Relations Act. The new legislation would either abolish or increase regulation of all temporary employment services.
Mdladlana and several trade unions have called for the abolishment of temporary services and indicated they were no longer willing to table discussions on proposed amendments. They called for the department's proposed changes to be enacted.
According to the South African Labour Guide, one of the most popular reasons for outsourcing labour is the benefit of a flexible workforce associated with the operational requirements of the client. If the Labour Department gets its way, one of the core benefits of labour broking will be lost.
“It is clear that it is the intention of government to place much more responsibility on the Temporary Employment Service (TES) provider as well as the client. The proposed changes will drastically reduce such flexibility and will place an increased responsibility on the client towards temporary employee in terms of relevant acts, as well the employment contract that the TES entered with the employee. One can ask if it would still be to the benefit of the client to pay a TES for such a service,” it said.
Proposed amendments
According to the Labour Guide, the proposed amendments appear to be aimed at increasing the responsibility of temporary employment service providers - but further analysis still needs to be done to indicate what the impact of the proposed amendments would be.
Tough proposals
Ideas presented in the proposal
All TES should be required to register subject to minimum requirements contained in the LRA and regulations.
* The minister of labour should have the regulatory power after consultation with the ECC to prohibit labour broking in specific sectors of the economy.
* Employees of a TES should remain employees during periods in respect of which they are not placed by a client.
* Probation should be regulated by legislation specifying a qualifying period during which ordinary unfair dismissal protections should not apply to new employees. During this period employees would be protected against automatic unfair dismissals. The qualifying period should be six months.
* All contracts of employment concluded with employees earning below a defined earnings threshold should be presumed to be of indefinite duration, unless the employer can demonstrate that the contract was concluded for a fixed term defined in the contract, and the employer had an operational justification for doing so.
The department's proposals state that TES would be required to register and would be subject to minimum requirements contained in the LRA. Any contractual arrangement between a client and an unregistered TES provider would be considered invalid.
It is also proposed that the current definition of section 186 of the LRA to be changed in order to avoid TES providers from arguing that a temporary contract of employment naturally expired due to the client requesting the removal of the worker. Other amendments allow for temporary workers to remain employees of the TES during periods that they are not placed with a client.
The minister of labour would also be given the regulatory power to prohibit labour broking in specific sectors of the economy, following consultation. The minister would also be enabled to enact a sectoral determination applicable to low-skill workers not covered by any other determination of a bargaining council agreement.
He would also be empowered to enact sectoral determinations applying to employees within the registered scope of the bargaining council, but not covered by a bargaining council agreement.
Implications
SA Labour Guide says some questions need to be asked. Proposed amendments, which detail wage agreements, are intended to ensure that wages that are paid to temporary employees are the same as those of permanent employees - limiting the existence of wage differences.
The company says questions of unfair labour practices could be raised, “if the wage of the temporary employee is changed during the periods that he does not work at a client, and whether the TES will have to continue to pay the temporary employee a salary during such periods”.
“Effectively, this means that an employee may no longer be appointed on a fixed term contract for a probationary period prior to being offered permanent employment. It further suggests that all temporary workers earning below a threshold (same as UIF threshold) must be appointed on open or indefinite employment contracts that have no end dates,” says the Labour Guide.
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